He told peers that austerity had caused “a great deal of personal misery”, with one in four children living in poverty, the use of foodbanks continuing to rise, and a social security system that was “increasingly inhuman and self-defeating”.

He pointed to disabled people losing their Motability cars – and consequently their jobs –because of the government’s personal independence payment reforms, while other benefit claimants have had their payments sanctioned for “unavoidably missing appointments”.

Lord Low said that this “misery” was caused by “conscious, strategic decision-making” by the government, including cutting £12 billion from social security spending in the last parliament, on top of nearly £20 billion cuts under the coalition government.

He said this was part of a 40-year project to “systematically shrink” public sector spending to just 36 per cent or less of national income, compared with 44 per cent in Germany and 50 per cent in Denmark.

And he told fellow peers that the Grenfell Tower fire showed the harm caused by this attack on state spending, with the NHS and other public services in crisis and local services unable to cope.

He said: “Local government, which provides many of these services, will have lost 60 per cent of its funding by 2020.

“The election and the Grenfell Tower fire should serve as a wake-up call that we need to change course.”

He called instead for government to borrow while interest rates are low in order to “invest in infrastructure, thus giving people work, getting them off the dole and being productive, fuelling growth by spending and creating demand for consumer goods, and paying taxes and boosting receipts for the exchequer”.

The independent peer said he believed that voters in the general election had been attracted by the alternative to “neoliberal austerity” offered by the policies of Jeremy Corbyn’s Labour party, which although they were widely described as “hard left” were in fact “fairly standard social democracy”.

Lord Low also said that the “colossal misjudgements” of the last two prime ministers, David Cameron and Theresa May – over calling the Brexit referendum and a snap general election – showed that it was “surely no longer possible to sustain the pretence that the Conservative party is self-evidently more effective than the Labour party as a vehicle for governing the country”.

And he said that “people should realise that the centre of gravity has shifted [leftwards], in defiance of the political establishment, the media and the commentariat”.